PRUDENTIAL chairman Harvey McGrath yesterday attempted to smooth balm on investor fears by insisting the majority of shareholders support the $35.5bn (£24.7bn) acquisition of AIA, after the group’s new Asian shares dived on their debut and reports suggested AIA’s boss believes the deal is “unworkable”.
“The response is constructive,” McGrath said after the dual listing of the Pru’s shares on the Hong Kong stock exchange. “The vast majority of shareholders are comfortable with the AIA transaction.”
McGrath’s support came as influential voting adviser RiskMetrics warned Prudential was paying a “full price” for its AIA takeover, and recommended shareholders voted against the acquisition.
Prudential’s shares fell over four per cent on the Hong Kong exchange to close at HK$57.20, after starting trading at HK$59.70. The group’s shares also dropped in their secondary listing debut in Singapore, falling four per cent to close at $7.41.
The floats do not raise any new capital for the group as the shares have been listed by way of introduction, meaning some of Prudential’s London shares have been converted to be eligible for trading in Asia.
The new listings came on the day the market was rocked by reports that AIA’s chief executive Mark Wilson had indicated to colleagues that he would resign if the Pru takeover goes through, citing the “unworkable” nature of the deal.
The insurer said it had received no indication from Wilson that he wishes to leave the combined company.
CHIEF EXECUTIVE OF AIA
THE man at the centre of the latest destabilising wave to crash over the Pru’s acquisition of AIA, the Asian business of American insurance giant AIG, is no stranger to positions of responsibility.
Before joining AIA, Wilson spent almost two decades working for the Axa group, first in New Zealand and then in Asia.
He eventually worked his way up to the position of chief executive for Hong Kong, leading Axa’s financial protection growth in the region and expanding its offering in the lucrative financial planning and wealth management markets.
After a short spell as chief operating officer at AIA, he became chief executive of the business in March last year, tasked with shouldering its belaboured operations through the most testing period in its history, the near-collapse of parent AIG.
Wilson also oversaw preparation last year for an initial public offering of AIA’s shares on an Asian stock exchange – plans that were only shelved when Prudential announced its intention to take over the business.
The float was expected to raise up to $8bn (£5.58bn) from investors, which would have gone towards reimbursing the US government for its bailout of AIG.